The Kolkata bench of the Income Tax Appellate Tribunal(ITAT) held that no reassessment proceedings were initiated under section 148 of the Income Tax Act,1961 without proper verification of recorded details of documents.
Salarpuria Properties Pvt, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the reassessment order passed by the assessing officer under section 148 of the Income Tax Act. The assessee had challenged the reopening of the assessment and its ground regarding reopening had been rejected by the commissioner (Appeals) in the impugned order.
S. Jhajaria, the counsel for the assessee contended that the assessee was engaged in real estate business and the income-tax Return reporting total income was filed which was accompanied by audited financial statements and tax audit report under section 44AB of the Income Tax Act and various other details.
It was also submitted that during the reassessment proceedings, there was no failure on the part of the assessee to disclose all the material facts necessary for assessment completed under section 148 of the Income Tax Act. it was further contended that the books of account had been audited and were produced in the course of assessment proceedings which have been verified and the assessing officer had simply relied on certain seized documents and had not applied his mind for initiating the reassessment proceedings.
G. Hukugha Sema, the counsel for the revenue contended that the documents relied upon to initiate the reassessment proceedings are seized documents that had been seized in the course of a search from a third person, unrelated to the assessee. It was also submitted that the objection against the reopening of the assessment by the assessee was against the law.
The two-member bench comprising of Sanjay Garg(Judicial) and Girish Agrawal(Accountant) held that the reassessment proceedings initiated under section 148 of the Income Tax Act were against the provision of law and the addition made by the assessing officer were without proper verification of recorded details of the documents while allowing the cross objection filed by the assessee.
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